Many people don't realize that Obamacare contains a new 3.8% tax on real estate sales.  

It won't effect most people, but it will effect those with upper income.  Add up all of your income from every possible source, and
if that total is less than $200,000 ($250,000 on a joint tax return), you
will not be subject to this tax.

From NAR: 

1. The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you'll never pay this tax at the time that you purchase a home or other investment property.
2. You'll never pay this tax at settlement when you sell your
   home or investment property. Any capital gain you realize at settlement
   is just one component of that year's gross income.
3. If you sell your principal residence, you will still receive the full
   benefit of the $250,000 (single tax return)/$500,000 (married filing
   joint tax return) exclusion on the sale of that home. If your capital
   gain is greater than these amounts, then you will include any gain above
   these amounts as income on your Form 1040 tax return. Even then, if
   your total income (including this taxable portion of gain on your
   residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.
4. The tax applies to other types of investment income, not just real
   estate. If your income is more than the $200,000/$250,000 amount, then
   the tax formula will be applied to capital gains, interest income,
   dividend income and net rents (i.e., rents after expenses).
5. The tax goes into effect in 2013. If you have investment income in
   2013, you won't pay the 3.8% tax until you file your 2013 Form 1040 tax
   return in 2014. The 3.8% tax for any later year will be paid in the
   following calendar year when the tax returns are filed.
6. In any particular year, if you have no income from capital gains, rents, interest or dividends, you'll never pay this tax, even if you have millions of dollars of other types of income.
7. The formula that determines the amount of 3.8% tax due will always
   protect $200,000 ($250,000 on a joint return) of your income from any
   burden of the 3.8% tax. For example, if you are single and have a total
   of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.
8. It's true that investment income from rents on an investment property
   could be subject to the 3.8% tax. But: The only rental income that would
   be included in your gross income and therefore possibly subject to the
   tax is net rental income: gross rents minus expenses like depreciation,
   interest, property tax, maintenance and utilities.
9. The tax was enacted along with the health care legislation in 2010. It
   was added to the package just hours before the final vote and without
   review. NAR strongly opposed the tax at the time, and remains hopeful
   that it will not go into effect. The tax will no doubt be debated during
   the upcoming tax reform debates in 2013.

Over the years, I have seen some truly spectacular homes here in Hawaii - from movie star mansions to CEO villas, the multitude of luxury homes in this corner of the world has always impressed me. Yet these 3 exquisite properties set the bar even higher, offering their potential owners a luxury lifestyle that's probably the best in the world. But don't just take my word for it - read on and find out how they earned their eye-popping price tags!

1. 6191 Hauaala Rd (Kauai) - $25 Million

As the single most expensive home for sale right now in Hawaii (excluding undeveloped land, of course), and with an asking price of $25 million, you might think that 6191 Hauaala Road has a lot to prove - but even a cursory glance at this wonderful property will clearly explain its position at the top of this list. With 3 separate residences boasting over 10,000 square feet of combined living space, hosting friends and family is never a problem here! The primary home, known as the "Cistern House," is a 3-bed/3.5-bath masterwork constructed largely from rare Hawaiian koa, Brazilian cherry, and walnut woods. Built as recently as 2006, the Cistern House also features wrap-around lanais, which facilitate gorgeous views of the surrounding scenery from any side of the house.

This property's second-largest residence, the Valley House, was built in 2004 and comprises 2 beds/2 baths, while its third and final residence, the Gatehouse, is the smallest with 1 bedroom and 1 bathroom. Beyond all of these fine residences, the property also incorporates over 100 acres of lush land, which includes the oldest grove of lynchee trees in all of Hawaii, a 125-year-old arch bridge, and a 75 foot waterfall which can be swum in at the bottom. Rounding out the amenities of this jaw-dropping property are its dual 4-bay garages, both of which are certified as being hurricane-proof. 

2. 3580 Anini Rd (Kauai) - $24 Million

As far as silver medals go, you could do a lot worse than the second most expensive home for sale in Hawaii: 3580 Anini Road! This private beachfront property on the trendy northern coast of Kauai boasts over 400 feet of white sand right on the water, which typically experiences year-round calm waves thanks to its highly-coveted location right beside the state's largest contiguous coral reef. Whether you are a fan of swimming and snorkeling in the ocean, going boating with friends, or simply relaxing in the sun, this property is perfect for those who wish to enjoy life while being surrounded by some of the finest scenery the Hawaiian islands have to offer.

The residence itself at 3580 Anini Road is no less spectacular than the rest of the property, with 4 bedrooms and 6.5 bathrooms spread out across 4,807 square feet of living area. With a splendorous design that harkens back to the glory days of tropical luxury living, it should come as no surprise that this home was designed by the famed architect Thomas Bingham. Thanks to a sleek internal design which evokes the very best of modernism, as well as a colonial-style exterior that leaves little doubt as to the luxurious nature of the structure itself, this home most certainly deserves its reputation as one of Hawaii's finest pieces of real estate.

3. 503 Portlock Rd (Oahu) - $23 Million

3rd place has never looked quite as good as the bronze medalist in our "3 Most Expensive Homes" list: 503 Portlock Road! With 7 bedrooms and 9.5 bathrooms spread out over 10,000 square feet of top-of-the-line living space and surrounded by almost 2 acres of lush property, there's no denying the multi-faceted appeal of this home. Looking for a spacious home in which to raise a large family, host friends for dinner parties, or simply kick back and enjoy the good things in life? If so, you could hardly do better than 503 Portlock Road, which features a colonial-style tropical design that harkens back to a bygone age of architectural pomp and respectability.

Not only is this property located on Oahu, it's even got a coastline view straight to that gorgeous island's defining natural landmark: Diamond Head! Situated near Maunalua Bay, 503 Portlock Road is the perfect choice for the homeowner who wants to enjoy some peace and quiet in the countryside, but who also wants to be within convenient driving distance of Honolulu. The best of both worlds: what more could one possibly ask for?

Congratulations to my buyer on this beautiful beach front purchase!  With over 10,000 sqft of space, 9 bedrooms and 6 baths, this is an estate that impresses all visitors.  With a beautiful sandy beach park right next it, a huge pool and spa, and a view beyond compare, this luxurious property was a bargain at $3.5million!  It's located just 10 minutes South of Kailua and 30 minutes East of Honolulu.  

Thanks to my client for his patience and flexibility!  You've got yourself an amazing property now! 

 Here check it out: 

Inspired by the lush tropical foliage and clear blue waters of the Hawaiian islands, many local interior designers have developed a unique sense of style over the years. Informed by a combination of classical design theory and distinct Hawaiian trends, this popular "Hawaii style" of interior design can today be seen everywhere from the condos of Honolulu to the waterfront bungalows of Oahu's North Shore. I recently asked some of Hawaii's most talented interior designers a few questions about how the state's unique geography and culture impacts their design decisions:

1. What defines the unique flavor of interior design in Hawaii?

"Tony, I believe Hawaii's landscape and changes in the sky integrate a unique filter on the colors of the Islands which give Hawaii its flavor. These colors are forever changing in their vividness and softness depending on the time of day and the cloud cover (or lack thereof). I take much of my inspiration for color palettes from Nature. Scuba diving and snorkeling are wonderful inspirations as well for the many colors of the fish and coral, ever changing colors of the sea - even lava and mosses provide a wonderful "paint color deck" of combinations and inspiration. The temperate climate, humidity and the ease of living outdoors offers another unique option to Hawaii interior design, allowing us to make use of outdoor spaces and furnishings all year long."

- Christina E. Birtcher, interior re*Design

"Hawaii is so unique in its cultural blend and that carries through to the interior feel of our homes. For instance you might have a family that has furniture from Japan, China or Korea blended with North American antiques and island style rattan. Since our lifestyle is much more relaxed than our mainland neighbors, we can assimilate these items and cultures more easily. We also tend to have much smaller homes so it is important that we make the best use of the space we have. Sometimes that means a room performs double duty, like bedroom / office. Our informality with entertaining, ie: potlucks versus formal dining rooms with sit down dinners, provides us more opportunity to get together with family and friends and just hang out."

- Joan Robinson-Whitaker, Designer For A Day

2. Which indigenous plants make the best houseplants here in Hawaii?

"I love using bromeliads due to their longevity, uniqueness of the flowers available and especially the leaf variations, ease of locating the plants and price point. Of course, orchids are also a favorite and will always remind people of the Tropics. Using Ti plants can also be a great option if you can revolve them indoors and out - the pops of color they provide is really a fun way to incorporate some height and color to a dreary corner or table. Ti plants are also a great option for your exterior lanai in unique pots where you can clump several together at different heights - they really make quite an interesting screen or console table accent."

- Christina E. Birtcher, interior re*Design

"For fresh plants, raffis palms and philadendrums are good choices. Bamboo, ficus trees and orchids are also popular in fresh and silk. We utilize silk plants (of good quality) when lighting or maintenance are issues."

- Joan Robinson-Whitaker, Designer For A Day

3. How does the interior design of condos in Honolulu differ from that of condos in other big cities like New York?

"I think the biggest difference is the furniture texture and artwork. Larger cities tend more towards sleek and cool neutrals, whereas the Islands allow us to incorporate many more textural furnishings and fabric texture, wallpapers such as grasscloths and color into wall art. Also, flooring options for the Islands, using cooler materials such as tile, bamboo or wood throughout vs. carpet. Using area rugs to anchor and separate rooms and areas instead. As I also noted previously, we may extend the use to outdoors which may be used year long vs. cities with climates that do not allow for this option."

- Christina E. Birtcher, interior re*Design

"I would say that Hawaii has a more casual aesthetic overall, a comfortable and relaxed sense of style. You won't see anything too edgy here. Even a contemporary design style will bring in some island textures, etc."

- Tiare Cowan, Archipelago Hawaii

4. How does interior design typically differ between waterfront properties and inland properties?

"Waterfront properties tend to be the higher-end, multi-million dollar properties. Often second and third homes. The design aesthetic can vary depending on the homeowner. It always surprises me when people use their mainland designers and end up with a home that looks like their other homes on the mainland. When people are looking for an island feel on a waterfront property, they tend to lean more toward the ocean color scheme so they don't detract from the amazing views around them. There is a user-friendly approach to finishes and fabrics that withstand the harsh elements of the salt, wind and sand. Sunbrella fabrics are very popular, even for interiors. Bronze is also a popular finish near the ocean, as the natural patina looks great over time instead of pitted and tarnished stainless steel or chrome."

- Tiare Cowan, Archipelago Hawaii

5. What new design trends can you see becoming popular among homeowners in Hawaii over the coming years?

"Wood, tile and vinyl flooring. The new vinyls can look like wood, and the new tiles can look like wood as well; the woods include cork and lots of unique finishes. We are also designing a lot of built-in's to take care of clutter and make better use of the room's space."

- Joan Robinson-Whitaker, Designer For A Day

"Outdoor kitchens, we are seeing more and more people wanting to create very functional outdoor kitchens. We are able to entertain outdoors here in Hawaii year round so it makes sense that we should move the kitchen where we want to spend most of our time. People love to grill here anyway so adding a few burners, some refrigeration and a sink can make for a very convenient outdoor grilling kitchen."

- Tiare Cowan, Archipelago Hawaii

A couple months ago, economist Paul Brewbaker predicted that Oahu single family home prices would reach $800,000 within 3 years. 

Is he trustworthy?  Well back in 2003, he predicted that the median price on Oahu would increase 60 percent from $380,000 to $600,000 by 2005, and he was exactly right.  Anyone that didn't listen to Brewbaker back then must be kicking themselves. 

So what about next year?  Brewbaker said he now expects median prices in the $700,000s could appear in 2013. That's an increase of nearly $100k in 1 year!

The University of Hawaii Economic Research Organization (UHERO) expects the median price to be a little lower than Brewbaker's lofty prediciton.  However, they do predict homes will have a median price of $787,400 in 2015, with condos rising to $360,400 in 2015 from $300,000 last year.

The forecast represents a 37 percent jump from last year's median price of $575,000 and a 22 percent gain from the peak of $643,500 in 2007.  Through June 2012, Oahu's median home sale price is up 8.7 percent to $619,750. 

Brewbaker cites building permit data going back 70 years, and said there were only two years in that time when housing permit volume was lower than it was last year: 1942 and 1943. "It took world war to make less new housing available than there is being produced today," he said.

What will cause such a rise?  Simple: the lack of inventory.  The island is not getting bigger, but the population is growing. There are basically no new homes being built in Metro Honolulu, Hawaii Kai, Kailua, or any of the other areas East of town. Sure there is new construction in Ewa, but it's simply not enough. 

So what will home prices do next year?  They will go up, probably to about $700,000 median, which by the way, is more like $1 million in East Oahu. 

Here is the original Star advertiser article

279 Oahu home sales in June, a +12.5% rise. Prices up to $620,000 from $562,500 last June, up +10.2%.

342 condos were sold in June, a decrease of 3.4 percent from June 2011.

According to the Days on Market indicator, sales for single-family homes were accepted at a slower pace last month compared to a year ago, with single-family properties listing for 35 days; condominiums were sold in a shorter amount of time, listing for just 30 days.

The market is going UP.

I just listed this beautiful Moana Kai town home in Hawaii Kai for $685,000.  We received multiple offers on the first day of showing and it is now in escrow over the asking price. 

Check out the beautiful lawn in front of the unit. 

This end unit has a 2 car garage, a small yard, and nobody above or below. We received a full price offer before we even showed it, and then multiple offers over asking price on the first open house.  One incredulous open house visitor asked, 'why did it sell so fast?'  The answer is simple - the inventory is low enough on Oahu that any good property priced correctly will sell immediatey.  If a property hasn't sold in a few days or weeks, and it's under $1million, there is probably something worng with the price.   

This unit features beautiful wood laminate flooring, granite counters, stainless appliances, upgraded tile floors in the baths, and built in custom closets.  

All this and a private yard for $685,000 list price.  

On Monday I listed this very nice corner unit in Nohona at Mililani Mauka for $430,000.

It is now in escrow after just 4 days, as we received 4 offers well over asking price.  The first open house is Sunday, but we already have an accepted contract plus a backup offer.  This nice 2 story unit has an enclosed yard and a 1 car garage. 

 Yes the market on Oahu is very strong.  I can hardly find enough homes to sell!

 Great for pets and a little BBQ.

 Nice open and modern kitchen.

From the Board of Realtors:

"During June, sales of 279 single-family homes and 342 condominiums were reported through the Board's
MLS; single-family home sales experienced a 12.5 percent increase while condominium sales decreased
by 3.4 percent from June 2011. The median price paid for island properties in June was $620,000 for
single-family homes and $297,000 for condominiums, an increase of 10.2 percent and a decrease of 1.3
percent respectively, compared to the same month last year. "

The average home sold for 96.1% of the list price in just 35 days.  That's a strong seller's market, with only 3.9 months of inventory available. There are 436 pending sales, an increase of 27.9% since last year.  This means that next month's sales numbers will be even higher, and the inventory will be even lower.  

 Sales are particularly strong in East Oahu, where inventory is so low that I have multiple buyers waiting for the same  type of house for months at a time. 

It's a great time to be a seller, a difficult time to be a buyer.  But with interest rates at 3.5% right now, it makes buying much easier than the last few years, even with prices up. 

With rates down more than 2% since a couple years ago, prices would need to increase 20% to make up the difference in the payment from having lower rates.  

The beautiful Allure Waikiki has updated its price list.  There are several units still available between $714,900 up to $1,094,900.  It is a great building!